Hudson Contract tells Government and HMRC how to help SMEs and freelancers
24th March 2020 | Hudson Contract
These practical steps would not cost the taxpayer a penny and could be set up straight away. Our proposals include:
1. HMRC should order all payments to subcontractors to be made gross rather than net.
Contractors make 10.6 million net payment transactions each year totalling £41bn. Suspending these deductions for one month would redistribute nearly £700m in much-needed cash.
Ian Anfield, managing director, said: “Removing deductions made under CIS will channel more money to the self-employed and small businesses. Paying gross will provide an immediate cash boost of £100-£200 for tradespeople and many thousands of pounds for small businesses.
“If Hudson Contract alone paid gross for one week, it would put an additional £7m into the hands of 37,000 self-employed people. We have raised this with HMRC and understand it is giving serious consideration to our proposal.”
2. HMRC should allow an early end to the tax year instead of waiting until April 6.
The tax authority could fast track refunds to CIS workers who are owed an average of £1,400 in over-deductions or it could simply pay a set amount ‘on account’ to all sole-traders until their self-assessments are returned.
3. HMRC could use Hudson Contract’s unique capacity to administer emergency payments between the state and self-employed people.
The payments could be quickly established and made with corresponding contracts in place.
4. The Government should suspend or scrap CITB’s training levy to provide an instant cash-flow boost to SMEs.
Last year, the quango used its powers to collect £135m from 62,000 micro, small and medium-sized employers to fund itself and its bizarre collection of ineffective schemes.
Ian Anfield, managing director, added:
“These are extraordinary times and we need an extraordinary response from government and industry.
“Hudson Contract is ready and willing to use its size, scale and specialist services to help the self-employed and small businesses survive the coronavirus crisis.
“Last week, we paid 37,452 people. For many, it will have been the last money they receive for the foreseeable future as more and more site closures are announced each day.
“Help is urgently needed.”